The poor showing sets the stage for a possibly weak nonfarm payrolls report on Friday, when the Labor Department had been expected to show 169,000 new jobs.

ADP: Private Sector Employment Up 135,000 in May

CNBC's Steve Liesman breaks down the latest numbers on jobs and discusses what it indicates about the economic recovery, with Mark Zandi, Moody's Analytics.

Economists sometimes will use the ADP numbers to adjust their estimates for the government account, even though the private-sector count has been a historically unreliable gauge.

"The job market continues to expand, but growth has slowed since the beginning of the year," Moody's economist Mark Zandi said in a statement.

Financial markets offered muted reaction to the report, with stock market futures off their lows. Investors have been using the weak economic reports to fuel hopes that the Federal Reserve will continue with its aggressive easing program.

"As far as the tapering debate goes, the report does nothing to bolster expectations that the Fed will ease its foot off the pedal over the summer," Andrew Wilkinson, chief market economist at Miller Tabak, said in a note.

Small businesses led the new job creation with 58,000 new positions; medium and large firms added 39,000 each.

Professional and business services was the most vibrant subsector at 42,000, while Trade, transportation and utilities added 31,000.